WOONSOCKET – Now that the City Council has approved sending out a supplemental tax bill, the focus shifts to the General Assembly, which must grant the proposal its blessing before the measure becomes law.
Legislative actions taken in support of locally driven initiatives are known as enabling bills and are often considered ministerial functions of the General Assembly.
But the controversial supplemental tax bill might not be a slam dunk.
“I would think it would be open for debate,” said Larry Berman, a spokesman for House Speaker Gordon Fox.
Berman said he expects the measure to be treated like any other. After receiving a draft of the bill, it would be introduced to the House Finance Committee and scheduled for a public hearing to give interested parties, including city residents, an opportunity to speak for or against the bill.
Mayor Leo T. Fontaine said he was expecting a draft of the proposed tax legislation to be conveyed to the General Assembly by the close of business yesterday. A work session to discuss the measure with members of the legislative delegation is scheduled for Monday night in Harris Hall. State Reps. Robert Phillips, Jon D. Brien, Lisa Baldelli Hunt and Sens. Marc Cote and Roger Picard have all been invited.
Much like members of the City Council, Picard sees supplemental taxes as a less painful option to the inevitable alternatives of a budget commission or bankruptcy, and so he will reluctantly support the measure. He thinks his colleagues in the House and Senate will do the same.
“I think there will be individuals who will be caught between a pledge not to raise taxes and their conscience,” said Picard. “Representatives of other communities who are in a similar situation may need the remedy in the future, and that may come into play as well.”
Supplemental tax bills have faltered at the State House in the past. Several years ago, North Providence asked for enabling legislation to pass supplemental taxes; a bill passed in the House but it failed in the Senate, according to Picard.
With the fiscal gas tank in the Woonsocket Education Department running on fumes, Fontaine said he and Finance Director Thomas Bruce have planned on “a two-week window” for the legislature to act before the money runs out, raising the specter of bankruptcy.
No, Fontaine says, the legislation may not be a slam dunk, but it should be. Cuts in the state aid, approved by lawmakers, are partly to blame for the city’s perilous fiscal condition, so now it’s up to lawmakers to provide cities and towns with the tools to rectify the situation, the mayor argues.
“Clearly we are in this position at least partly because of cuts in state funding,” he said. “I would hope they would at least provide us with some ability to save ourselves in the short term.”
Fontaine said he and members of his administration have already discussed the need for supplemental taxes with Speaker Fox and Senate President Teresa Paiva Weed. He stopped short of saying they have pledged support for the proposal, but he said they understand the city’s predicament.
After more than four hours of discussion and vociferous protest from city residents Monday, the City Council passed a 13 percent supplemental tax bill that could raise taxes on a house worth $200,000 by some $626 in that last quarter of the fiscal year. That brings the net tax increase for the year to more than 17 percent instead of the roughly 4 percent hike envisioned at the beginning of the fiscal year.
It’s all due to the surprise discovery of a $10 million deficit on WED ledgers several months ago despite departmental forecasts, now known to be erroneous, of a surplus. The bungled accounting has triggered charges of mismanagement and malfeasance, prompting the council to take the first steps toward launching a formal inquiry that could morph into a criminal investigation.
With cash flow in question, the city remains at risk of losing control of its financial decisions to a state budget commission or, in a worst-case scenario, a Central Falls-style receiver. So far, the state has decided to give the city time to try to work out its financial problem on its own, but time may be running out.
In order to keep the state overseers at bay, Fontaine must successfully piece together a multi-tiered program of cuts and tax hikes that spreads the pain around in a manner State Revenue Director Rosemary Booth Gallogly believes is fair. But major components of that plan are still in play, including a proposal to cut $1.8 million in salaries from city employees for the last quarter of the fiscal year.
That boils down to a 10 percent pay cut for teachers, firefighters, police and other city workers through June 30, retroactive to April 1. Fontaine said Tuesday he’s still waiting to hear back from representatives of six city employees’ unions on whether the rank and file is amenable to the offer. The union leaders met as a group with Fontaine last Friday to hear his offer.
And, despite the council’s 6-1 vote in favor of supplemental taxes, it won’t be a done deal without the General Assembly’s seal of approval. And without the authority to tax, the city will have no way of raising some $4.3 million it desperately needs to run the school department through the end of the fiscal year. The plan is to borrow the money from a bank against the anticipated collection of taxes so the funds are accessible in the short time frame during which they’re needed. But without legislative approval, there will be no tax bills, and nothing to borrow against.